Larger agents in England found flouting the ban on letting agent fees should receive fines up to £30,000 to ensure greater levels of compliance with the new laws, it is suggested.
With a ban on letting agent fees set to go ahead in England after the election the Chartered Institute of Environmental Health (CIEH) has revealed what was in its submission under the Government’s consultation process.
CIEH backs a complete ban on all letting agents fees and argues that this would remove some of the barriers tenants face in moving out of a poor quality home, while ensuring standards can improve in the private rented sector.
The organisation, which represents environmental health professionals, the workforce that carries out inspections in the private rented sector, has recommended fines of up to £30,000 for larger property managing agents would be in line with the civil penalty for committing a banning order offence.
The membership body has also recommended that holding deposits should not be exempt from the ban as they might allow for loopholes to exploit tenants, such as agents hanging onto more than one tenant’s holding deposit for the same property.
It pointed out that holding deposits also pose an additional barrier for tenants wishing to move home as they increase the amount of money that is needed to secure a new tenancy, and if they are permitted, they should be registered under a mandatory client money protection compensation scheme to avoid abuse.
In the submission CIEH also suggests that tenants should be provided with accessible information on their rights and the obligations of letting agents and how to lodge a complaint with the correct enforcement body and it does not believe rents should rise as a result of the introduction of a ban.
It wants the ban on letting agent fees to also apply to landlords and third parties to avoid additional charges to the tenant via another route and it adds that premium sectors of the market should not be exempt from the ban as it could create loopholes, such as allowing agents to market certain properties as being bespoke or up-market
Finally, it argues that there should only be exclusions to the ban for the rent, the refundable deposit and for in-tenancy property management services, where this is due to the tenants’ action.
Tamara Sandoul, CIEH policy manager, explained that the underlying point behind all of the suggestions in the submission is that they will help improve standards and conditions in the private rented sector, while protecting tenants.
‘The private rented sector is such an important part of the housing market, providing homes for people who otherwise cannot afford to buy their own, especially the vulnerable and those on low incomes,’ she said.
‘While the vast majority of letting agents are responsible, there are those who exploit tenants by charging them extortionately high fees. A comprehensive ban on letting agents’ fees is a very positive step forward. It will give tenants greater freedom to move out of properties that are hazardous and in poor condition, which in-turn should drive up standards and quality of rented housing,’ she added.
‘We do not expect to see higher rents because of the ban as the cost of referencing new tenants is likely to be small in comparison to the costs of maintaining a property to a good standard. At the moment managing agents are charging both the landlord and the tenant fees, but this ban should help to increase competition between letting agents and help to drive the total costs down,’ she concluded.
